Optus at risk of losing almost 487,000 subscribers to rival Vodafone

How will profits be impacted?

Singtel's Australian subsidiary stands to lose up to 487,000 subscribers after its rival Vodafone managed to ink an mobile virtual network operator (MVNO) deal with TPG Telecom.

Under the deal, TPG Telecom will migrate its 320,000 mobile customers from Optus to the Vodafone network. As TPG recently acquired iiNet, Optus could also stand to lose another 167,000 mobile customers once iiNet’s MVNO contract with Optus expires.

According to CIMB, these subscribers make up 5.2% of Optus' customer base, and financial impact will be small as TPG only makes up 0.4% of Optus' total service revenue.

"Losing TPG as an MVNO customer may not be a big deal, as TPG has been struggling, with subscribers falling from 370k in Jan 2014 to 320k in Jul 2015. In addition, for TPG to migrate its subscribers over to Vodafone, a SIM-swap would be required, which would be an additional hassle for its customers and could take a few weeks to a couple of months to be fully completed. In the meantime, Optus can try to compel these subscribers to stay on its network,” CIMB said.

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